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2022 Best Practices Study Results Released

Congratulations to our South Carolina Best Practices Agencies

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As the independent agency channel moves past the coronavirus pandemic and into uncertain economic headwinds, Best Practices agencies achieved record highs in organic growth and profitability, according to the 2022 Best Practices Study by the Big “I" and Reagan Consulting.

The Best Practices update is the first one in its three-year cycle, examining the firms that newly qualified as a 2022 Best Practices Agency. The annual study, conducted jointly in a longstanding partnership between the Big “I" and Reagan Consulting for the past 29 years, provides critical performance benchmarks in six agency revenue categories ranging from under $1.25 million to over $25 million.

“The past few years have brought challenges for independent agencies and their clients, but top-performing agencies have demonstrated resiliency as they've weathered these obstacles to grow their businesses and even break study records in numerous categories," says Chris Boggs, Big “I" vice president of agent development, education and research. “These industry leaders are setting the bar and demonstrating the independent agency channel has never been healthier."

The Best Practices Study analyzes takeaways from nominated Best Practices firms throughout the nation that have been recognized for outstanding management and financial achievement in categories such as income and expense distribution; revenue and profitability growth; sales and service staff compensation and productivity; technology expenses; and property-casualty and life-health carrier representation.

“Best Practices agencies are writing the playbook for success, and agencies can look to these strategies to guide them toward operational excellence as they seek to better serve their clients," says Tom Doran, a partner with Reagan Consulting. “As these industry leaders are setting the bar and demonstrating the independent agency channel has never been healthier, study results also indicate that an increased focus on producer recruitment and development is a must to maintain the industry's progress."


Key findings from the update include

  • Organic growth breaks Best Practices Study record. At 9.2%, organic growth was up 2.5 times from last year's results of 3.7%. Organic growth increased in all six revenue groups in this year's study.

  • Profitability remained at all-time highs. At 26.2%, Best Practices agency profitability went up slightly from last year's 25.9% result.

  • The Rule of 20 achieved a record high. The Rule of 20, calculated by adding 50% of profitability to organic growth, reached a record high in this year's study of 24 versus 18 in last year's study. The Rule of 20 is the best metric with which to gauge overall agency health. 

  • Sales velocity gained ground from last year. While a hard market continued to provide much of the organic growth lift, new business improved materially in this year's study. Sales velocity totaled 15.5% versus last year's 13.2%.

  • Mergers & acquisitions bolstered growth. In the 2022 study results, 22.3% of Best Practices agencies acquired business, up from 16.4% in last year's study.

  • Producer recruitment and development proves challenging. Net unvalidated producer payroll (NUPP), a measure of producer recruitment and development, remained at 1.1% of net revenues compared to 1.2% in last year's study. A healthy NUPP investment would be 1.5%-2.0%, an indication that agencies should consider redirecting a portion of today's record profits toward new producer investments.

  • ​Shareholder and producer ages hold steady. The weighted average shareholder age (WASA) was 53.2 years, and the weighted average producer age (WAPA) was 48.6. Agencies should manage these two metrics carefully as lower WASA and WAPA are critical to long-term agency perpetuation. 

The annual Best Practices Study began in 1993 as a joint initiative between the Big “I" and Reagan Consulting and studies leading agencies and brokers in the country to help independent agents build the value of their agencies.

There will be a free 30-minute webinar covering highlights of this year's study on Oct. 5 at 2:00 p.m. ET.


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South Carolina Best Practices Agencies

  • ​​CSP Insurance Services, Florence 
  • Irmo Insurance Agency, Irmo 
  • Peoples Underwriters, Conway 
  • South Carolina Insurance Brokers, Greenville

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